IRS Announces Health Savings Account Contribution Limits for 2018

Health Savings Accounts have received a lot of attention over the past few months as the accounts manifest themselves as a leading option for certain employees enrolled in a high-deductible health plan, allowing these employees to contribute money pre-tax for healthcare expenses in the short- and long-term.

Background

A health savings account a tax-favored account that allows eligible individuals covered by a qualified High-Deductible Health Plan (HDHP) to pay for current and future qualifying medical expenses tax-free. Defined contribution healthcare dollars are commonly used to fund health savings accounts. Signed into law in 2003, these accounts have grown in importance over the years and are expected to be a lynchpin of future healthcare reforms.

HDHP maximum out-of-pocket amounts (deductibles, co-payments and other amounts, but not premiums)

Self-only: $6,550

Family: $13,100

Self-only: $6,650

Family: $13,300

Self-only: +$100

Family: +$200

* Catch-up contributions can be made any time during the year in which the HSA participant turns 55.

** Unlike other limits, the HSA catch-up contribution amount is not indexed; any increase would require statutory change.

Difference Between IRS and HHS Limits

Additionally, the IRS limits differ from those set by the Affordable Care Act and announced by the Department of Health and Human Services on December 22, 2016:

2017

2018

Out-of-pocket limits for ACA-compliant plans (set by HHS)

Self-only: $7,150

Family: $14,300

Self-only: $7,350

Family: $14,700

Out-of-pocket limits for HSA-qualified HDHPs (set by IRS)

Self-only: $6,550

Family: $13,100

Self-only: $6,650

Family: $13,300

Related Resources: Health Savings Accounts

We’ve been talking about the evolution of HSAs alongside the Affordable Care Act, offering key insights into the best practices for employers, employees, and servicers like banks and other financial institutions. Learn more by reading our resources below: